As Medical Cannabis Industry Booms, China Remains Quietly on Top

When a new industry really comes into play, it creates a paradigm shift in its wake, a changed world due to new laws, regulations, business possibilities, new lines of revenue, and new collectors of this revenue. When it comes to the burgeoning global medical cannabis industry, while Africa pushes towards a new paradigm shift, China still remains firmly on top…for now.

The idea of China sitting at the top of global industries has become a new paradigm to life in and of itself. It’s a strange joke that seems to permeate anywhere outside of China that China owns everything, and whether its technically true, it’s hard to get around the fact that an incredibly large percentage of everyday goods, in vast regions of the world, are emblazoned with the now ubiquitous ‘Made in China’. Especially when it comes to low cost production, China has cornered the market and this stretches from electronics to clothing to nearly any household item, office item, and beyond.

So, it’s no massive surprise that a material like hemp, which has near universal applications, would be grown quite a bit in China, and even as many countries still hold it as illegal to grow, or are only now opening their laws to it. Since a large percentage of the legal cannabis market now revolves around medical cannabis, and since a substantial amount of medical cannabis can be made from hemp, by reinstituting its hemp market earlier than other countries, China became – and still remains – the largest hemp producer in the world.

China is one of the largest exporters of medical cannabis as well. It might not be one of the markets people generally refer to when talking about how China owns everything, but when it comes to the hemp market and everything therein, China is still a massive force to be reckoned with.

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Differences in regulation

When talking about regulation it’s important to remember that there are two main types to consider when dealing with something like cannabis. The first type has to do with consumers. What are residents of a country allowed to do; and this can be broken down into different sections: actively using something, simply having possession of something, growing something, etc. Then there are the laws that look at the business perspective.

What is the government, or approved private enterprises, allowed to do; and this too can be broken down into component parts: growing something, importing something, exporting something, etc. Sometimes the laws match up, and there is more synchronicity between what private citizens can do and what private business/government can do. Sometimes there’s a vast amount of differences. Recently, Africa has been a hot spot for this. A big, red, flashing, arrow pointing exactly to this idea. But truth be told, China’s been at it for a long time too.

Cannabis laws for citizens of China

It’s illegal. It’s a pretty quick and easy breakdown. Chinese residents can’t use, possess, buy, sell, transport, grow, or give away cannabis. Not in any amount, not in any capacity. Not for recreation, not medicinally. It’s just plain illegal to be caught with cannabis of any kind as a citizen of China. This sentiment doesn’t go back as far as with some countries, and really only came into play around 1985 when China joined the Convention on Psychotropic Substances. Prior to that time cannabis use was more likely to be ignored by law enforcement.

Enforcement and punishment can vary if a person is found breaking these laws. Minimum penalties might mean being detained for a number of days and subject to a fine of about $140. More severe penalties include sentences from five years to life in prison. In the most extreme cases, China does use the death penalty, and will exercise it, particularly for supply crimes. While China seems to be known for this practice of using the death penalty for cannabis crimes, finding any kind of confirmable information or numbers about it was not possible.

While many countries have gotten looser, China is one of those countries that has only gotten tighter and less open to cannabis use. China has put in much effort to deter especially younger generations from cannabis of any kind, pushing a large stigma against it, and suggesting that use has, indeed, gone down. China, much like Japan, got a little creepy in its desire to stop all citizens from trying marijuana, even appealing to its citizens abroad in Canada to stay away from it when it was legalized over there.

A kind of messed-up overreach when considering what that really means. When we leave one country and enter another, we leave the laws of the old and enter the laws of the new. It’s how our world works. The idea of trying to further influence citizens who are under a different country’s jurisdiction is quite an affront to the new country in question, and just a weird and unnecessary (and kind of desperate) overstep of power.

Commercial regulation of cannabis

Commercial cannabis regulation is an entirely different story in China, and commercial hemp has been legal to grow since 2010. China is the biggest grower of hemp in the world, holding about half of the world’s hemp-growing space, much of which is in the Yunnan province. In this region it’s said that cannabis is worth about $300/per acre, which makes it more profitable than even rapeseed (canola oil to Americans).

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It exports this hemp along with hemp products, including CBD. CBD is cannabidiol, one of the non-psychoactive cannabinoids of the cannabis plant which has legally been separated from the whole THC-containing plant in many countries in order to change how it’s regulated. While China has not done this in order to permit use for its own citizens, it has become one of the biggest exporters of CBD products to other countries.

China is not the easiest country to get statistical information from, and though basic numbers are sometimes released in different places, its very difficult to get a real consensus. That said, according to the World Intellectual Property Organization, Chinese companies or individuals claim about half (306 of 606) of the current global patents relating to cannabis. There are about 50 enterprises that have licensing to grow industrial cannabis in China, but only a handful have licensing for production. At least two of China’s 34 regions have become hugely involved with the cultivation of cannabis for CBD.

Medicinal use

China allows for cannabis cultivation and production for export, but never created a medical program for the residents of its own country, and maintains complete illegalization on that front. This wouldn’t necessarily be reason for extra mention, but there’s a particular contradiction to it in this country. The tradition of Chinese medicine is probably the most famous when thinking of natural medicine traditions throughout history that still exist today.

As herbal remedies make a resurgence in the present, much of it is based on Chinese remedies that have been used for centuries, and this widely includes the cannabis plant. According to a study that highlighted the China Health Statistics Yearbook 2018, approximately 32% of medical visits in China that year were to Chinese traditional medicine practitioners, and that’s no small number.

The idea that cannabis would be illegalized in a country that still holds so tightly to its natural medicine history, while legalizing the production and export of it to other countries…, well it’s a head shaker, that’s for sure, and a sad reminder that China built its empire on slave-labor sweat shops, and will likely maintain itself into the future this way.

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Conclusion

Whereas finding information about licensing fees and industrial regulation is easier with other countries, along with them virtually begging for investments, China isn’t like that. Specifics of this nature aren’t put out as much, and there doesn’t seem to be a push for foreign investment in the same way. In fact, it seems most companies popping up, and licenses being obtained, are for Chinese businesses. And somehow that makes sense. After all, who wouldn’t expect that China would dominate in this arena? And why would they rely on outside help if they never did before?

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